How low-paid employees avoid poverty: An analysis by family type and household structure

The risk of poverty is very unevenly distributed in society. Some groups - unemployed people, tone parents, large families, people with disabilities, and some ethnic groups - have much higher poverty rates than average. Some events - losing a job, marital breakdown, having children - also put people at high risk of poverty. But being in a high-risk group does not necessarily mean you will be poor, nor does experiencing an event with a high poverty risk attached to it. Some people avoid poverty, despite being in high-risk groups or facing high-risk events. This article focuses on one such group - low-paid workers - and explores whether and how people in low-paid jobs are able to avoid poverty. We consider three main options - own wages and in particular working long hours, living with other people and sharing income, and state transfers through the tax and benefit system - and compare these across different family and household types. The results highlight the importance of household living arrangements in protecting low-waged individuals against poverty.